June 4, 2013 7:51pm
Earlier today Industry Minister Christian Paradis denied TELUS’ $380 million bid to acquire Mobilicity.
Paradis was stern in his words about giving the new entrants a fighting chance. “Our government has been clear that spectrum set aside for new entrants was not intended to be transferred to incumbents. We will not waive this condition of licence and will not approve this, or any other, transfer of set-aside spectrum to an incumbent ahead of the five-year limit. Our government will continue to allow wireless providers access to the spectrum they need to compete and improve services to Canadians… I will not hesitate to use any and every tool at my disposal to support greater competition in the market.”
Tony Lacavera, WIND Mobile’s Chairman and CEO, stated in an an interview during the Canadian Telecom Summit that he is once again interested in opening discussions with Mobilicity to purchase or merge the two companies. WIND was previously in talks with the carrier last year, but the conversations fell through.
In light of the Industry Ministers decision, Lacavera said that “I think the decision today sets the stage for a renewed discussion between Mobilicity and WIND given that incumbents are, at least for the remainder of the set aside period, are no longer eligible buyers of that spectrum. I’ve maintained since inception of WIND that new entrants need to co-operate. We need to find a way to work together if we’re going to have a chance against going up against the big guys. So I maintain that view and I think this is a renewed opportunity for discussion.
Mobilicity currently has 250,000 subscribers and 150 employees. If a deal between the two carriers would eventually come to be – which was a suggestion by Toronto-based Catalyst Capital Group (who’s also owns a portion of Mobilicity’s outstanding bonds) – it would bring their total subscriber base to over 850,000. This represents just over 3% of wireless subscribers in Canada.